Postscript:
Expulsion

One
by-product of the GST issue
was a demonstration to Canadians
of what happens to MPs who
dare to side with their
constituents instead of
the government whip in present
day Ottawa.

From
virtually the beginning
of his period as Finance
Minister, Michael Wilson
struck me as the embodiment
of my late father’s view,
expressed in the mid-1950s,
that the main goal of the
national Conservative party
was to improve the financial
lot of wealthy Torontonians
and Montréalers. His changes
in personal income taxes
following the 1984 election
indicated that high-income
earners were to be the main
beneficiaries while many
low and middle-income families
faced successive volleys
of tax increases. The National
Council of Welfare estimates
that by 1991 the federal
taxes for families with
a total income of $25,000
will have risen 60 per cent
since 1984.

Reforming
Ottawa’s corporate income
tax meant that the share
of federal tax revenues
generated by our income
tax on companies would fall
from 18 per cent in 1980
to an estimated 10 per cent
for this fiscal year. Donald Blenkarn, the minister’s
usually like-thinking chairman
of the Finance Committee,
and Murray Dorin, the vice-chairman,
both said publicly earlier
in 1990 that they would
like to see the federal
corporation tax abolished
completely.

When
Wilson released his technical
paper on the GST in the
spring of 1989, I was troubled
from a number of standpoints,
most notably on the issues
of fairness and simplicity.
I asked the Library of Parliament
and as many other sources
as possible for everything
they could provide and began
to dig into the proposal
in depth. Constituents and
individuals and groups from
many provinces were also
sources of much good advice.
Like an onion, the more
layers I managed to remove
the worse it smelled.

For
example, many Outer Canadians
believe the major motivation
for the GST was to release
about 75,000 manufacturers,
mostly located in southern
Ontario and around Montréal,
from the burden carried
since 1924 of collecting
the MST in favour of requiring
more than two million small
businesses and individuals
across the country to collect
an even larger amount of
revenue from consumers everywhere.
When responsible economists
estimated that the switch
from the MST to the GST
represented a tax break
of approximately $4 billion
on business inputs, mostly
for larger companies, my
father’s earlier view took
on an even sharper focus.

Canadians
in cities sensed that the
new tax would be an additional
obstacle for the very large
number of small businessmen
selling all manner of services
and goods to each other.
Many instinctively shared
the view of the Toronto
urbanologist Jane Jacobs
on value-added taxes: "no
neater little tax contrivance
could be imagined for favouring
large, relatively self-sufficient
enterprises such as multinational
corporations with their
many subsidiaries and many
internal transactions while
penalizing symbiotic production.
Such a tax," she concluded,
"needlessly twists the knife
in the very vitals of city
economies."

In
early October of 1989,1
sent a detailed submission
to the Commons Finance Committee
which reflected my conclusion
that the GST would be a
major policy error of National
Energy Program proportions.
A copy was sent to every
Conservative MP and senator.
It contained a range of
serious objections to the
proposal. For example, the
seven per cent GST levy
on transportation services
struck me as providing an
especially discriminatory
blow for Outer Canadians
generally, both as consumers
and producers. Someone in Nanaimo, St. John’s or Yellowknife
would be required, for the
first time, to pay seven
per cent on the cost of
shipping a refrigerator
--most probably from somewhere
in Inner Canada -- based
on the distance involved.
A producer in Outer Canada
would have to absorb a similar
levy in order to compete
in our most populous markets
within Inner Canada. The
present MST provides a small
tax advantage to remote
manufacturers of finished
products -- so the MST provides
one of the few competitive
advantages Outer Canadians
enjoy.

Except
for a brief period in Denmark,
my submission stressed,
countries with a value-added
consumption tax invariably
raise the rate significantly
after its introduction.
Handing Ottawa a fresh means
of raising vast quantities
of new tax monies would
inevitably reduce the current
public pressure to bring
the national finances and
debt under control. As nations
with value-added taxes all
appear to have higher levels
of government spending than
those which don’t, the introduction
of the GST would, in my
view, only ratchet up overall
spending by Ottawa to new
and higher levels.

The
submission stressed the
view of the Atlantic Provinces’
Economic Council that the
ability of a manufacturer
or retailer to pass on the
GST to consumers in Atlantic
Canada would be greater
than in regions of greater
population concentration
where market competition
is more vigorous. The GST
is simply a means of collecting,
from residents of nine of
our ten provinces, a second
and differently calculated
retail sales tax which would
prove a nightmare for most
of those required by law
to collect it. I’ve since
learned that if the Senate
passes the tax as is, Canada
will be the only nation
on earth with a two-tier
sales tax, most probably
calculated differently,
in nine provinces. A recent
study by the Institute for
Policy Analysis estimates
that a harmonized federal-provincial
goods and services tax would
cost more than 200,000 jobs
in the first years of implementation.

I
agreed with a study which
was done by the Cambridge
Research Institute that
where a value-added tax
is designed to raise additional
revenues -- as this one
undoubtedly was, despite
Michael Wilson’s repeated
claims that it would be
revenue neutral -- price
increases are greater than
where such taxes do not
raise more taxes than what
they replace. A Conservative
MP from Britain had admitted
to me that Margaret Thatcher’s
virtual doubling of the
value-added tax to 15 per
cent during 1979 was one
major reason why the U.K.
inflation rate rose from
8 percent in 1979 to 20
percent in 1980.

The
cost of the GST in reduced
revenues and employment
and additional administrative
costs to businesses which
are price sensitive would
be high. Wilson’s technical
paper suggested that a series
of taxes and rebates on
eleven transactions occurring
between the iron ore and
washing machine dealer stage
would produce only $54 in
GST revenue for Ottawa.
But at what administrative
cost and loss of sales to
all those required to be
Ottawa’s collectors along
the way? A spokesman for
the Boy Scout movement in
Western Canada had told
me they expected their revenues
at the earlier nine per
cent rate would drop by
eighteen per cent under
the tax: nine per cent in
revenues and nine per cent
to collect it. What would
be the full costs of this
measure for our large voluntary
sector nationally?

The
experience of the European
Community nations with value-added
taxes is not encouraging.
In some, business felt it
was simply pre-financing
government because it had
to file tax returns monthly,
while rebates came quarterly.
Evasion of the tax in Europe
appeared to be considerable,
especially in the service
sector, either through barter
arrangements without invoices
or through selling services
free of the tax and then
either not recording the
sale or invoicing for less
than the full amount charged.
European consumers minimize
their tax payments by making
as many purchases as possible
abroad. In Canada, a similar
measure would both encourage
our nationals to buy more
taxable items in the United
States and discourage all
visitors to Canada from
buying within Canada.

In
a cover letter sent with
my submission to all Conservative
MPs, I attempted to dissuade
them from the party whip’s
argument that voting against
the GST bill would constitute
a gross parliamentary heresy.
I referred them to a study
on confidence votes done
by Eugene Forsey and Graham Eglington. It noted that
between 1867 and 1872 there
were dozens upon dozens
of Commons decisions in
which Conservative MPs voted
against measures of the
first John A. Macdonald
administration without impairing
the ability of his cabinet
to govern effectively. In
1914, R.B. Bennett of Calgary
both spoke out strongly
against and voted against
a proposed railway agreement
of his own Prime Minister,
Robert Borden, with no consequences
for the dissident MP and
future Conservative party
national leader.

More
advanced parliamentary systems
permit MPs to vote against
their respective political
parties. In Britain, taxation
bills have not been regarded
as confidence votes since
1834. In our own country,
the defeat of the Trudeau
government in 1983 on a
clause of an Income Tax
Amendment was not deemed
a confidence vote.

In
mid-October, I received
a reply from Donald Blenkarn
which I felt was neither
persuasive nor substantive
in any respect. He wrote,
for example, "Once you have
covered your needs for food
and shelter and clothing,
then what you spend starts
to have more and more of
a volunteer nature to it."
Only a Tory MP-lawyer-businessman-hobby
farmer could make such a
statement. How, I asked
in a six page rejoinder,
would he answer low and
middle income Canadians?
Moreover, how would greater
savings be encouraged by
a tax which would reduce
the standard of living for
most Canadian families?
Both of us sent copies of
our letters to the Conservative
national caucus.

Additional
letters went back and forth
on the subject among Blenkarn,
myself and other Conservative
caucus members. None received
from other caucus members
contained much common sense
or logic. From private conversations
with Conservative MPs during
the period, I concluded
that few of them could make
a persuasive case for the
proposal. Most had simply
accepted it on blind faith
from the Finance Minister
and were searching for ways
to defend it to hostile
constituents.

I
sent many objections on
behalf of concerned organizations
and individuals to Michael
Wilson. None of his replies
dealt realistically with
their concerns, usually
because most of the responses
were based on suppositions
that were absurd in the
real world of commerce.
His officials were equally
unconvincing. On one occasion,
I attempted to obtain a
study from them on the regional
consequences of the GST.
It never arrived.

I
went through a period of
conscience-searching while
wondering if I should sit
as an independent MP because
of my deepening opposition
to the GST and other policies
of the government. After
speaking with a number of
friends and supporters,
I resolved to soldier on
within the caucus. My hope,
albeit an increasingly faint
one as time went by, was
to dissuade colleagues,
some of ten years’ standing,
that the GST was socially
and economically wrong and
politically suicidal.

This
personal goal worked reasonably
well for a number of weeks
until it became clear that
a majority of the Alberta
Conservative caucus wanted
Alex Kindy, the MP for Calgary
Northeast, and myself to
leave each Tuesday night
when discussion of their
strategy to sell the GST
to Alberta voters began.
This struck Kindy and me
as reasonable since by this
point neither side was going
to move on the basic issue.
Both sides agreed that we
would leave at this point
near the end of each caucus
meeting. It breaches no
canon of caucus secrecy
to say that since the 1984
election, the national Conservative
caucus functions primarily
as a forum in which provincial
caucuses tell the prime
minister and other colleagues
what’s on their members’
minds.

Several
weeks later, I arrived for
the regular Tuesday night
Alberta caucus meeting to
find the prime minister
was also attending. No sooner
had we all taken our seats
than someone proposed that
I leave because the GST
would be discussed. Assuming
that Mulroney knew my position
on the tax from copies of
letters sent to him and
from various media accounts
of speeches I’d made against
it, I bit my tongue and
said virtually nothing before
leaving. Thereafter, I did
not return to either the
Alberta or national caucus
before the April 10 final
vote in the Commons on third
reading, because it was
pointless. The positions
of both the national and
Alberta Conservative caucuses
and myself on the GST were
irreconcilable. Some weeks
after the prime minister’s
visit, Dr. Kindy and I both
received a one sentence
letter from the chairman
of the Alberta Conservative
caucus, Bobbie Sparrow,
telling us that we’d been
suspended from the caucus.
In fairness, she telephoned
first to say the letter
was coming, but there was
little discussion of the
substance.

Shortly
before the final vote, I
signed individual letters
to all government MPs recapitulating
why I would oppose the bill.
I pointed Out that numerous
constituents (approximately
7,500) and others had, in
one form or another, indicated
their opposition to the
measure; all but one member
of the Edmonton Southeast
Conservative Association
executive had voted for
a motion recommending that
I vote against the measure.
I reminded them that the
Canadian Bankers Association
and the Business Council
on National Issues were
prominent among the few
groups supporting the measure
across Canada. The letter
ended by saying that I’d
stand with my constituents,
personal convictions and
Canadians generally and
vote "nay."

The
government response was
almost immediate after Kindy
and I voted against third
reading of the GST bill.
To the media outside the
House, I indicated that,
for a decade, I’d voted
only once against my party
except on some Meech Lake
amendments and intended
to attend the national caucus
the next morning to defend
my right to do so on principle.
It was not to be. Remarks
made by the government whip,
Jim Hawkes, to the media
later that evening indicated
Kindy and I had already
been expelled from the government
caucus. How, we both wondered,
could this unprecedented
occurrence in the Conservative
national caucus have happened
without any species of hearing?
Why had Hawkes not even
bothered to telephone either
of us when he prided himself
on being able to reach every
government MP within minutes
at any time?

Kindy
and I learned later that
the other members of the
Alberta Conservative caucus
had held an emergency meeting
soon after the vote and
voted to expel both of us.
Hawkes then evidently approached
House Speaker John Fraser
and told him that the two
of us were to be removed
from the government side
of the Commons. Fraser,
for whom I have the highest
respect and affection, simply
had no choice under our
present outdated parliamentary
practices but to comply
despite the absence of any
species of due process.
I’m certain that as Speaker
he had no inkling at all
as to how the two heretics
had been banished.

Late
the same night, Alex and
I discussed the situation
on the telephone and agreed
that attempting to attend
the next morning’s national
caucus, a political lynching
in the making, would be
foolish. He took an early
flight for Calgary to face
his voters; I decided to
catch a noon flight to Edmonton
but beforehand to do my
best during the morning
to ensure that the Prime
Minister’s "press line"
on the matter, whatever
it was, was not the only
one available for the Ottawa
media. By the time Mulroney
came out of the national
caucus in the late morning
to announce that it had
decided to expel Kindy and
myself, copies of the new
seating plan had already
been distributed to journalists
by the Speaker’s office.
Later, when I asked one
of them why no one quizzed
the Prime Minister on this
obvious contradiction in
his story, he shrugged and
replied, "Why bother?" It
was, however, gratifying
to learn that several MPs
present in the national
caucus had objected strongly
to the lack of any hearing
before expelling two colleagues.
The national caucus chairman,
Bob Layton, appointed by
the Prime Minister, wrote
a very short letter of dismissal
the same day, "we are sorry
that you have chosen to
withdraw your support for
and confidence in the government.
Your decision requires me
to advise that you will
no longer be recognized
as a Member of our National
caucus."

Arriving
in Edmonton in the late
afternoon, I went directly
to a press conference and
announced that in the unusual
circumstances, I would sit
as an independent Progressive
Conservative for the time
being. William Stewart,
president of the Edmonton
Southeast Conservative Association,
who confronted the journalists
with me, was strongly supportive
of my position. Virtually
all other members of the
25-member riding executive
had been encouraging as
well. It was, however, a
painful situation in every
respect. An Edmonton reporter
said the Prime Minister
had denounced me as someone
who had never spoken up
for Alberta on the GST.
"That comment would melt
the Blarney Stone," I quipped.
From comments Mulroney had
made personally to me, I
knew that he was perfectly
aware of my position on
the tax before the vote.

After
campaigning for the party
for twenty-five years in
nine of the ten provinces,
including thirteen constituencies
in Québec during the heat
of the 1984 election campaign,
I did not consider myself
a fair-weather party supporter
as was claimed by the party
leader. Instead, I felt
like many in Eastern Europe
who had for years supported
a very different political
party but now found themselves
no longer able to accept
it or to believe its leadership.
It strongly appeared from
hundreds of letters, telephone
calls and comments I later
received from individuals
all over the country that
Canadians generally disapproved
of the nature of the Prime
Minister’s strong personal
attack against someone who
disagreed in principle with
a government proposal.

Only
the Senate can still stop
the OST. I think it is better
to be right with our unreforrned
Senate on the issue than
to be wrong with a popularly
elected House of Commons
whose government members
had voted together, dismissing
Edmund Burke’s wise advice
that an MP must never surrender
his judgement to anyone.

Government
MPs and like-minded editorial
writers argue that the Senate
is unelected. However, the
argument seems rather hollow
considering that members
of the majority who voted
for the bill didn’t reflect
the views of their constituents
while "dissenters" were
expelled from the government
ranks. The incident might,
therefore, help to convince
Canadians that our current
parliamentary practices
must be changed. In a House
of Commons where one party
has a majority, the prime
minister dictates his instructions
to the MPs of his party,
completely dominating them
for the period between elections.

We
reformers are not advocating
total independence on the
part of MPs, only that the
parliamentary rules clearly
specify under what narrow
conditions a defeat of a
measure in the House will
also cause a government
to fall. The present situation,
under which virtually any
lost vote can be declared
by a prime minister to have
been a confidence vote,
should be unacceptable to
any Canadian democrat at
the end of the twentieth
century. Our present practice,
largely abandoned among
parliamentary democracies,
persists only because it
makes life easier for prime
ministers. It attracts much
public ridicule of government
MPs and elected office holders
at both our national and
provincial levels.

Westminster,
as the mother of parliaments,
itself offers a way out
of the present situation.
There, for several decades
government private members
have voted regularly against
their party leadership.
In one period during the
mid- l970s, the government
averaged one defeat in the
House per government bill
without falling. Older and
mostly docile backbenchers
in Britain are being replaced
by more independent, smarter
and younger MPs concerned
about their occupational
credibility. In our own
much larger and more diverse
country, it strikes me that
allowing MPs greater freedom
to represent our constituents
would also help all political
parties to better discharge
their national role as vehicles
of reconciliation.